How flexible will CMS be in granting waivers to expand Medicaid coverage under the Affordable Care Act (ACA) in states still holding out? Should states be permitted to insert provisions ostensibly intended to promote “personal responsibility” in such waivers? Given CMS’s approval of Michigan’s “Healthy Michigan” plan at the end of 2013, and given that other states, such as Indiana and Pennsylvania, seek to go even farther in their waiver proposals, we may not yet have seen the limits of CMS’s flexibility in permitting state holdouts to join the ACA expansion fold.

Healthy Michigan is perhaps the most modest of several state proposals based loosely on the Healthy Indiana Plan, a waiver program that has been in effect since 2008. Healthy Michigan expands Medicaid to all childless adults in the state from age 19 through 64 earning up to 133% of the federal poverty level (FPL). Enrollees will be responsible for nominal cost-sharing and, for those earning between 100% and 133% FPL, premium amounts up to 2% of their income.

These amounts break little new ground. However, the mechanism for payment and possibility for reducing that payment do. Copay amount aren’t collected at the time of service, but rather after the fact through funds that enrollees pay into a “MI Health Account.” While the details of these accounts were left unfinalized in CMS’s approval of the waiver proposal, Michigan proposes that enrollees pay a nominal monthly amount equal to the copayments for which they are responsible for medical care received over the preceding six months, divided by six. For example, if an individual had three physician visits in the last six months, with a copayment of $2 for each, and filled three prescriptions during that time period, with a copayment of $1 each, then the individual would be required over the next six months to pay a monthly amount of $1.50 into his MI Health Account ($9 divided by 6). If an enrollee fails to pay, the state may not remove her from the program, but may be able to collect the payment by alternate means. The state will be responsible for providing enrollees with quarterly account statements. Enrollees who participate in “healthy behaviors” can have their cost-sharing amounts reduced.

Michigan’s demonstration is modest in comparison with other proposals. Under Indiana’s proposed waiver, which would continue its current Healthy Indiana program, enrollees would be responsible for paying not nominal amounts, but rather up to $1,100 per year into a “POWER” account, which would then be used to pay the enrollee’s share of premiums, copayments, and non-covered health care needs. Even the lowest-income enrollees would be required to pay at least $13.33/month into their account, up to a maximum of 5% of their income. Those who fail to make required contributions within a specified period of time are removed from the program. Indiana contends, on the basis of limited evidence, that enrollees with “skin in the game” make better health care decisions. While CMS extended Healthy Indiana through 2014 with some modifications, it has not yet ruled on whether it will allow the program to be used as Indiana’s expansion vehicle.

Pennsylvania, as part of its “Healthy PA” plan, has proposed imposing premiums on members of its expansion population earning more than 50% of the federal poverty level – lower than under any existing waiver. The state claims that “[t]his requirement provides a mechanism for participants to engage in their health care encouraging them to make healthier choices, both in their daily lives and when making decisions about their health care. Additionally it will prepare these individuals for health coverage financial obligations that will become their responsibility when their income increases and they move into private health care coverage.” Enrollees who demonstrate “healthy behaviors” may have their premium or cost-sharing amounts reduced. The proposal would also, most notably and again unlike any other existing Medicaid waiver, require all “able-bodied,” unemployed and “under-employed” enrollees between the ages of 21 and 64 to register for and participate in work search activities. The state claims that this requirement “will result in better physical and mental health outcomes” for enrollees. The state received public comments on the proposal, and plans to develop a final, forthcoming waiver proposal.

CMS is understandably interested in encouraging states to participate in the ACA’s Medicaid expansion. Millions of Americans will be denied health coverage if states such as Indiana, Pennsylvania, and Texas continue to hold out. But the poorest Americans ought not to be subject to paternalistic and arguably draconian obligations in order to obtain necessary health care. Requirements such as Pennsylvania’s proposed mandate that expansion populations seek work in order to obtain health benefits assume that the poor are poor because they are lazy and lack the moral fortitude that those in better economic straits allegedly possess. But research on the issue paints a much more complicated picture (examples are voluminous, but for two examples, see here and here). Personal responsibility and good health choices are laudable goals, to be sure. But it is questionable at best to require impoverished populations to spend meager resources and have their lives scrutinized by public officials in the ostensible service of these goals, especially where evidence of the effectiveness of these means is lacking.